We Already Have Life Insurance!...

[zmazmzm]

When I sit with someone for MP and they tell me that they already have LI, what's the most tactful way you'd ask to compare what they have?
My ideas:
If there was a way I could save you some money on your monthly premiums, maybe even with higher coverage amounts, would that be something that might interest you?
-or-
Are you sure you're not paying too much for that coverage?
etc. etc.

What's your approach? Also, what in the world are you looking for in that policy? Just the face and premium? I'm so new I don't even know what to look for. Please elaborate and thanks in advance!!!!!!!!!!!!

 

[OHInsAGNT]

When I sit with someone for MP and they tell me that they already have LI, what's the most tactful way you'd ask to compare what they have?
My ideas:
If there was a way I could save you some money on your monthly premiums, maybe even with higher coverage amounts, would that be something that might interest you?
-or-
Are you sure you're not paying too much for that coverage?
etc. etc.

What's your approach? Also, what in the world are you looking for in that policy? Just the face and premium? I'm so new I don't even know what to look for. Please elaborate and thanks in advance!!!!!!!!!!!!

If you're only selling MP, I'd pick up a couple appointments with regular life carriers.

To actually answer your question: MP is totally different from life insurance. Explain to them how the declining balance works and makes the premium more affordable (if it does). You really shouldn't be replacing true life with MP, it's not usually going to be in the client's best interest. Hence, my earlier comment.

 

[g-squared]

When I sit with someone for MP and they tell me that they already have LI, what's the most tactful way you'd ask to compare what they have?
My ideas:
If there was a way I could save you some money on your monthly premiums, maybe even with higher coverage amounts, would that be something that might interest you?
-or-
Are you sure you're not paying too much for that coverage?
etc. etc.

What's your approach? Also, what in the world are you looking for in that policy? Just the face and premium? I'm so new I don't even know what to look for. Please elaborate and thanks in advance!!!!!!!!!!!!

Here's my strategy:

"That's terrific that you already have life insurance. If I might ask, who handles that for you?"

There are only three ways they can answer:

1) None of your business.
2) I have coverage at work.
3) I have coverage through XYZ company or John Q. Agent.

If the answer is 1) "None of your business" or some other type of negative objection, there are some ways to overcome it. I like to use ...

"I'm a financial professional and I am licensed and regulated by the state of [Illinois]. As such, I have a duty to make sure that the people I speak with about insurance are properly insured. The reason I ask 'who handles your life insurance' is that most people have not seen an agent in a very long time and they are not aware of or taking advantage of some of the unique benefits and features in their life insurance policies. I’ve also found that when reviewing older policies that many of them have mistakes in them and are not set up properly. When was the last time you met with an agent to review your policies?"

I've found that if you say the above nicely, most people will answer honestly, and you'll find in 80% or more of the cases it's been more than a year since they met with their agent, or that they only have coverage at work, or that they have coverage thru XYZ company but they've never heard from their agent since they bought the policy.

Your next question, and, of course, if their answer was 2) "have it at work" or 3) "Have with XYZ Company/JQ Agent"....this is your follow up as well:

"How much coverage do you have?"

You might have to ask two or three times....Do you have coverage at work? Is it a multiple of your salary? Do you have any coverage you personally own and pay for? Etc.

Once you have established that they have Life Insurance and how much coverage they have....here's where it gets fun.....

Mr./Mrs. , let me show you something. Take out a clean sheet of scratch paper. Here, take my pen and write down on this sheet the amount of life insurance coverage you said you currently have. {wait for client to do so} Okay, now cross off the last four digits {wait for client to do so} and multiply the number you have left by two. {wait for client to do so} Now, take that number and multiply by 30. {wait for client to do so…offer calculator if necessary} What figure did you come up with? {wait for answer}

Mr./Mrs. , that amount is the amount of money your present coverage will provide for your family every month, if you can earn 8 percent interest on your money. Now, you probably have a pretty good idea of how much money it takes to run your household every month. Are you really happy with that figure? {wait for answer}

Two possible follow-ups if they say NO, I'm not happy with that figure:

1) "what is a figure you would be happy with?"

All you then have to do is reverse the math and figure out a total coverage amount that equals the figure that they just cited.

2) Do a fact finder to determine what the proper coverage amount should be.

If they say YES, I AM HAPPY with the figure, and the figure seems low, you need to paint the picture for them if their income was taken out of the picture. If you give a couple of examples and they are still happy, the desire may not be there and it will be better to talk at another time.

By the way, here's how the shortcut math works out on a person with $250,000 of coverage:

$250,000
cross off four zeros and you're left with $25
$25 x 2 = $50
$50 x 30 = $1,500

And just in case there are any financial math whizzes and or actuaries lurking out there....If the beneficiaries set up a perpetuity with the life insurance proceeds, at 8% annual effective interest:

$250,000 x (.08/1.08) = $18,518.52

$18,518.52 divided by 12 = $1,543.21


I think it's easier to sell Life Insurance to people who already have it.

 

[Newby]

Here's my strategy:

"That's terrific that you already have life insurance. If I might ask, who handles that for you?"

There are only three ways they can answer:

1) None of your business.
2) I have coverage at work.
3) I have coverage through XYZ company or John Q. Agent.

If the answer is 1) "None of your business" or some other type of negative objection, there are some ways to overcome it. I like to use ...

"I'm a financial professional and I am licensed and regulated by the state of [Illinois]. As such, I have a duty to make sure that the people I speak with about insurance are properly insured. The reason I ask 'who handles your life insurance' is that most people have not seen an agent in a very long time and they are not aware of or taking advantage of some of the unique benefits and features in their life insurance policies. I’ve also found that when reviewing older policies that many of them have mistakes in them and are not set up properly. When was the last time you met with an agent to review your policies?"

I've found that if you say the above nicely, most people will answer honestly, and you'll find in 80% or more of the cases it's been more than a year since they met with their agent, or that they only have coverage at work, or that they have coverage thru XYZ company but they've never heard from their agent since they bought the policy.

Your next question, and, of course, if their answer was 2) "have it at work" or 3) "Have with XYZ Company/JQ Agent"....this is your follow up as well:

"How much coverage do you have?"

You might have to ask two or three times....Do you have coverage at work? Is it a multiple of your salary? Do you have any coverage you personally own and pay for? Etc.

Once you have established that they have Life Insurance and how much coverage they have....here's where it gets fun.....

Mr./Mrs. , let me show you something. Take out a clean sheet of scratch paper. Here, take my pen and write down on this sheet the amount of life insurance coverage you said you currently have. {wait for client to do so} Okay, now cross off the last four digits {wait for client to do so} and multiply the number you have left by two. {wait for client to do so} Now, take that number and multiply by 30. {wait for client to do so…offer calculator if necessary} What figure did you come up with? {wait for answer}

Mr./Mrs. , that amount is the amount of money your present coverage will provide for your family every month, if you can earn 8 percent interest on your money. Now, you probably have a pretty good idea of how much money it takes to run your household every month. Are you really happy with that figure? {wait for answer}

Two possible follow-ups if they say NO, I'm not happy with that figure:

1) "what is a figure you would be happy with?"

All you then have to do is reverse the math and figure out a total coverage amount that equals the figure that they just cited.

2) Do a fact finder to determine what the proper coverage amount should be.

If they say YES, I AM HAPPY with the figure, and the figure seems low, you need to paint the picture for them if their income was taken out of the picture. If you give a couple of examples and they are still happy, the desire may not be there and it will be better to talk at another time.

By the way, here's how the shortcut math works out on a person with $250,000 of coverage:

$250,000
cross off four zeros and you're left with $25
$25 x 2 = $50
$50 x 30 = $1,500

And just in case there are any financial math whizzes and or actuaries lurking out there....If the beneficiaries set up a perpetuity with the life insurance proceeds, at 8% annual effective interest:

$250,000 x (.08/1.08) = $18,518.52

$18,518.52 divided by 12 = $1,543.21


I think it's easier to sell Life Insurance to people who already have it.

I'm no math wiz but couldn't you eliminate a step and multiply the $25 by 60?

 

[Russ]

I'm no math wiz but couldn't you eliminate a step and multiply the $25 by 60?

A rambler, eh......ramble on.............

 

[sman]

If you're only selling MP, I'd pick up a couple appointments with regular life carriers.

To actually answer your question: MP is totally different from life insurance. Explain to them how the declining balance works and makes the premium more affordable (if it does). You really shouldn't be replacing true life with MP, it's not usually going to be in the client's best interest. Hence, my earlier comment.

Ohio, most MP coverage being marketed today is nothing more than traditional term insurance. It does not decrease in value as you described. It's hard to even find decreasing term anymore.

 

[zmazmzm]

If you're only selling MP, I'd pick up a couple appointments with regular life carriers.

To actually answer your question: MP is totally different from life insurance. Explain to them how the declining balance works and makes the premium more affordable (if it does). You really shouldn't be replacing true life with MP, it's not usually going to be in the client's best interest. Hence, my earlier comment.

Declining balance? This is all I've sold as uf yet, so what is that?
Pick up appointments with a few regular life carriers? Why a few? What is regular life insurance? (whole? universal?) Please elaborate on what you are saying (because I'm so new) and please tell me why you say that? the reason I ask so in deapthly is because in my past sales experience (home improvements), I always found it usefull to learn not just the mechanics of something, but the phsycology behind it to. If a sales manager/mentor said "at that point you say THIS or you say THAT". I would ask why you would say THIS or THAT. Has really helped over the years. Thanks in advance for elaborating!!!!!
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Here's my strategy:

"That's terrific that you already have life insurance. If I might ask, who handles that for you?"

There are only three ways they can answer:

1) None of your business.
2) I have coverage at work.
3) I have coverage through XYZ company or John Q. Agent.

If the answer is 1) "None of your business" or some other type of negative objection, there are some ways to overcome it. I like to use ...

"I'm a financial professional and I am licensed and regulated by the state of [Illinois]. As such, I have a duty to make sure that the people I speak with about insurance are properly insured. The reason I ask 'who handles your life insurance' is that most people have not seen an agent in a very long time and they are not aware of or taking advantage of some of the unique benefits and features in their life insurance policies. I’ve also found that when reviewing older policies that many of them have mistakes in them and are not set up properly. When was the last time you met with an agent to review your policies?"

I've found that if you say the above nicely, most people will answer honestly, and you'll find in 80% or more of the cases it's been more than a year since they met with their agent, or that they only have coverage at work, or that they have coverage thru XYZ company but they've never heard from their agent since they bought the policy.

Your next question, and, of course, if their answer was 2) "have it at work" or 3) "Have with XYZ Company/JQ Agent"....this is your follow up as well:

"How much coverage do you have?"

You might have to ask two or three times....Do you have coverage at work? Is it a multiple of your salary? Do you have any coverage you personally own and pay for? Etc.

Once you have established that they have Life Insurance and how much coverage they have....here's where it gets fun.....

Mr./Mrs. , let me show you something. Take out a clean sheet of scratch paper. Here, take my pen and write down on this sheet the amount of life insurance coverage you said you currently have. {wait for client to do so} Okay, now cross off the last four digits {wait for client to do so} and multiply the number you have left by two. {wait for client to do so} Now, take that number and multiply by 30. {wait for client to do so…offer calculator if necessary} What figure did you come up with? {wait for answer}

Mr./Mrs. , that amount is the amount of money your present coverage will provide for your family every month, if you can earn 8 percent interest on your money. Now, you probably have a pretty good idea of how much money it takes to run your household every month. Are you really happy with that figure? {wait for answer}

Two possible follow-ups if they say NO, I'm not happy with that figure:

1) "what is a figure you would be happy with?"

All you then have to do is reverse the math and figure out a total coverage amount that equals the figure that they just cited.

2) Do a fact finder to determine what the proper coverage amount should be.

If they say YES, I AM HAPPY with the figure, and the figure seems low, you need to paint the picture for them if their income was taken out of the picture. If you give a couple of examples and they are still happy, the desire may not be there and it will be better to talk at another time.

By the way, here's how the shortcut math works out on a person with $250,000 of coverage:

$250,000
cross off four zeros and you're left with $25
$25 x 2 = $50
$50 x 30 = $1,500

And just in case there are any financial math whizzes and or actuaries lurking out there....If the beneficiaries set up a perpetuity with the life insurance proceeds, at 8% annual effective interest:

$250,000 x (.08/1.08) = $18,518.52

$18,518.52 divided by 12 = $1,543.21


I think it's easier to sell Life Insurance to people who already have it.

I like your approach with the questioning. But, what is that monthly number for at the end of your calculation? What am I showing them? Where does the 8% come from? Where am I going from there with it? Again, this Mort Prot is all I've ever sold. I really, really want to learn all of the nuts and bolts of the other types, so please elaborate.

 

[g-squared]

I'm no math wiz but couldn't you eliminate a step and multiply the $25 by 60?

Yes, but I want the client to go "A-ha!" and realize that the 30 represents 30 days in a month....

But, what is that monthly number for at the end of your calculation? What am I showing them? Where does the 8% come from? Where am I going from there with it? Again, this Mort Prot is all I've ever sold. I really, really want to learn all of the nuts and bolts of the other types, so please elaborate.

The monthly number is the approximate amount of money one could earn if, for example, the insured passed away and the beneficiary took the death benefit and dropped all of it into some type of interest-bearing account.

Let me give you an example. Let's say Fred dies tomorrow; he has $100,000 of Life insurance in force. Fred's wife takes the $100,000 check from the insurance company and invests it in an interest-bearing account that conserves the principal (this is what's known as a perpetuity ... similar to an immediate annuity except that it last forever). In exchange for the $100,000 deposit, the financial institution that takes this money (it could be a bank, it could be an insurance company) agrees to pay 8% interest on the $100,000 every year. So each year, they are paying out $8,000 to Fred's wife. She chooses to have this cut up into monthly payments of $666.67 apiece. My shortcut math has her earning $600 a month....remember it is a math "shortcut", an estimate, it's not supposed to be exact.

BTW, I did the calculations and my shortcut example (earn $1,500 a month from $250,000 deposit) works out to an annual effective rate of 7.88 percent. But I like to work in round numbers when explaining concepts to clients and 8 percent is just easier to say and understand.

Of course, in today's interest rate environment, who's going to pay 8 percent? The client realizes this (or you can subtly point it out to him ...."Wouldn’t you agree that's it's awfully hard to earn 8% on your money these days?"); hopefully, this realization is another thing that makes him say to himself, "Gee, I really DO need to get some more coverage!"

One you've got the client realizing that he is under-insured, then you have to do some fact-finding with him and discover what his needs are. This fact-finding process can be in-depth or you can simplify it to fit the needs of your client. Once you have the information, you can suggest (an) appropriate solution(s), such as a permanent policy (whole or universal), a term policy, or even a combo of the two.

Disclaimer: My guy Fred and his wife are fictitious. Any resemblance to anyone on this board is purely coincidental.

 

[Todd King]

When I sit with someone for MP and they tell me that they already have LI, what's the most tactful way you'd ask to compare what they have?
My ideas:
If there was a way I could save you some money on your monthly premiums, maybe even with higher coverage amounts, would that be something that might interest you?
-or-
Are you sure you're not paying too much for that coverage?
etc. etc.

What's your approach? Also, what in the world are you looking for in that policy? Just the face and premium? I'm so new I don't even know what to look for. Please elaborate and thanks in advance!!!!!!!!!!!!

If you get the old, "We've already got life insurance", then you might want to say something along these lines...Good! I would be shocked if you didn't. However, with the fact that the actuarial tables changing many times over the years, it never hurts to check out what you have. Besides that, if what you have is good for you now, then you get a free second opinion and you can rest even easier!
It also seems you need some Life Insurance 101. I can't give you the full course but I will get you started.
First off, ALL life insurance is term! Term in and by itself of course has no cash value/investment to it. Whole Life and Universal Life and any other life insurance of those lines have some sort of savings/investment side to it. Take that away and you still have term.
Whole life has been around for many many years while Universal has not. Universal was started by the insurance companies to combat the whole "Buy Term and Invest the Difference" philosophy started by A. L. Williams. BTID was/is a good concept The only problem there is that most people won't actually stick to investing the difference and then there's the fact that the A.L Williams (now Primerica) agents are not really professionals and for the most part don't know what they are doing.
The face and the premium are just the 1st starting points in looking at a policy. If it's a Universal you need to see what the company is sending them every year and compare that to what is in the cash value accumulation sheet in the policy. It probably won't match the "projected" figures and you can easily show them where it will eventually run out or the company will write them a nice little letter saying that if they want to continue this valuable coverage they need to send in more money! Of course now, we have the option to give the "No Lapse Guarantee" with the Universal so at least they are starting to correct this. You also need to look for any riders in the policy that may need to be updated or maybe they are even outdated.
I hope this helps some.

 

[Franz Kafka]

When I sit with someone for MP and they tell me that they already have LI, what's the most tactful way you'd ask to compare what they have?
My ideas:
If there was a way I could save you some money on your monthly premiums, maybe even with higher coverage amounts, would that be something that might interest you?
-or-
Are you sure you're not paying too much for that coverage?
etc. etc.

What's your approach? Also, what in the world are you looking for in that policy? Just the face and premium? I'm so new I don't even know what to look for. Please elaborate and thanks in advance!!!!!!!!!!!!

"That's great. Do you have the old kind or the new kind (new CSO)?" "Uh I don't know"
"Do you own it or rent it? If you rent it for how long?"
"Uh I'm not sure"
"Is it a guaranteed one or a non-guaranteed one?"
"Ha ha I really don't know"
"Well would you be open to finding out exactly what kind you have or is it a non-issue?"
Yes>apptment, no>bye